Red Emperor interim loss widens after $15m write-off in Somalian joint venture
Oil and gas explorer Red Emperor said its first half pre-tax loss increased sharply as a result of a substantial write-off against its joint venture in Somalia.
The London-listed group posted a first-half loss of $15.4m (£10.4m) compared with a $307,914 loss the year before, after one of its joint venture in Puntland, Somalia, suffered a $15.2m write-off after the Somalian federal government “hardened its position with regards to the requirement of contracts”, which meant the group had to reduce its presence in the region.
“Given the considerable efforts taken by the joint venture to date in Puntland, the joint venture has requested a two-year extension to the current exploration period from the government of Puntland to allow time for these political challenges to be resolved,” Red Emperor said in a statement on Monday.
“As a result the directors are of the view that exploration and evaluation expenditure should be written down to nil.”
Red Emperor shares were down 10.85% to 2.30p at 14:31 on Monday.